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Samourai Wallet, co-founder of Bitcoin Privacy App, overturns criminal charges from the U.S. government and New Court Application The Justice Department case should be phased out because it broke down with years of Treasury policies and threatened to criminalize open source software.
Keonne Rodriguez and William Hill were charged with running an unlicensed currency transfer business and conspiring to launder money, and filed a joint motion to demand a federal judge in Manhattan dismiss the indictment.
The two’s lawyers said Samulai wallets never processed user funds and should not be considered a financial institution or currency transmitter under federal law.
At the heart of the dispute is the difference between a custodial service that controls customer assets and non-custodial tools such as Samourai, which only help users blur blockchain transactions using a method called CoinJoin.
According to the motion, Samulai users always retain control over cryptocurrencies and the app simply coordinates transactions that enhance privacy.
The developer’s defense cites the long-term guidance of the Ministry of Finance’s Financial Crime Enforcement Network (FINCEN) that anonymous software providers are not subject to currency transmitter rules.
“Fincen never insisted that it was a currency transfer business that had to be licensed. Instead, Fincen always advises companies and software applications that do not “accept” or “transmit” funds are not “transfer” businesses,” Fileing Reads.
The defense believes that the Justice Department’s allegations mark a sharp and unprecedented breakthrough in the interpretation of “in the battle against Fincen’s obvious regulatory power.”
For them, the Justice Department acted similarly to “charging fees for shovel manufacturers because it might know that the killer used shovels to bury victims” or “charging fees for burner phone manufacturers because it might know that some customers use their phones to promote drug crime.”
In the motion, lawyers warned that the Justice Department’s theory could hint at a wide range of developers building privacy tools.
Several crypto advocacy groups including the Coin Center and the Defi Education Fund already have Released interest In case of filing a French summary in support of the motion, warn that, if allowed, innovation can be made and civil liberties can be violated.
The court plans to hear the debate on July 22.
